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tv   The Communicators  CSPAN  July 5, 2014 6:30pm-7:02pm EDT

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sports with lead to a discussion on race and society. >> c-span created by america's cable companies by your cable company over 30 years ago and brought to you by your local cable or satellite provider. >> well, nearly 100,000 people have commented so far on the s.e.c.'s open internet policy set at the may 15th meeting of this year. we're going to have a policy discussion today on the communicators about what the f.c.c. is proposing and get different points of view. one of our guests joining us is from philadelphia, kevin werbach with with the university of pennsylvania up there. legal studies and business ethics professor and also s.e.c. veteran and -- f.c.c. veteran and worked on the obama stradigs team. what do you think of what the f.c.c. proposed at the may 15th
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meet something >> the f.c.c. proposed a set of open internet principles. the f.c.c. tried in 2010 to put rules in place but most of those rules were overturned in court so the f.c.c. tried to in a pragmatic way put into place rules that ensure there's not blocking of traffic, there's no degradation of traffic on the internet and so forth. but they also sought comment on a variety of different other approaches. so i think given the complexity of the situation, given all of the politics involved and all of the questions involved in this, i think they did a pretty good job. i think they asked the right questions and it's absolutely appropriate so many people are writing in and commenting. this is a tremendously important issue. >> matt wood is with free press. he's their policy director. mr. wood what do you think? >> we think the f.c.c. did ask some of the right questions but the path they're proposing to do that ken is talking about,
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preventing blocking and degrading of traffic is not going to do anything for the rest of us and will not work. the f.c.c. chairman said he wato use a particular legal authority to reinstate the rules, section 706 of the telecom act with apologies for diving straight in to numbers and codes. the court case that was issued in january in the d.c. circuit basically said ok, if you want to use section 706, will you have to allow substantial room for individualized bargaining and discrimination. right there in the text of the court case saying that the f.c.c. has some authority under this statute but not the authority to prevent discrimination or blocking. that's why we agree with chairman wheeler saying we need to have these protections in place, we appreciate the fact he's asking these questions. we just think the answers he's provide 0ing thus far with his preferred path will not get us to the place where the f.c.c. is prevent this discrimination and blocking by i.s.p.'s. >> and randolph may of the
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foundation, what is your opening statement? >> first, thank you for having me here and i'm glad to be here with my friend matt and kevin as well. i have a different perspective. the bottom line is that they not move forward to adopt new regulations. at this time they just proposed rules. what i prefer to say is the commission to watch the marketplace, see how it continues to develop. remember, the internet space is a dynamic space. it's changing very rapidly. and this is the key point. in its notice, and even in its previous attempt to adopt rules, the commission really hasn't identified a market failure, in other words, it's not saying this market has completely failed and consumers are being harmed at this time.
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there are an awful lot of coulds and mights in the notice about things that might happen and could happen to consumers and i agree if they did happen, the commission in that case should take some action. but the commission itself says quite explicitly that it doesn't -- that in its view, the need to adopt these regulations is not dependant upon whether there's really a failure, in other words, whether there's lack of competition or whatever. right from the beginning from our perspective, that's the wrong approach to take. i'm sure it's what we're going to get into will be, let's assume the commission is going to adopt rules in one form or another. it's not just going to, as i would prefer it to do, to watch and wait and defer to congress.
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and then there's a very big question and i think kevin alluded to this and matt as to what course of action the commission should take. they're basically two different proposals. one that i think matt prefers is to -- for the commission to classify the internet providers as common carriers, referred to as title 2 approach. and another -- the other approach would be to adopt a commercial reasonable 234s standard under which their practices would be judged through whether or not they're lawful or not. i will just say at this point and i think we will get into i think lovely discussion about these two different approaches. the title 2 approach -- and i think matt will agree with this -- that's essentially the same
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common carrier model that was first adopted actually back in 887 when congress adopted past the interstate commerce act to regulate railroads, thought to have monopolist tick power. it was incorporated essentially for all practical purposes word for word into the communications act when it was adopted in 1934 to regulate what was thought to be the monopolist tick telephone system, what we called ma bell at that time. and if we put these two x's together, interstate commerce on one side and communications act on the another side, title 2, i'm absolutely certain because i have studied them, that they're essentially the same. what they do -- it was their purpose to do, was to establish really strict regulatory
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controls on these entities to prevent the abuse of market power. and i would submit that now at this time in this digital age we have a very different situation d we don't want to apply railroad type regulation to telephone companies. assess your position correctly? >> in some ways. these for not new rules they're proposing but have the principles we all had in case for our communication system. so the notion somehow we can do without them now because there's no market failure ignores the fact we still need an open 0 and nondiscriminatory communications platform available to everybody even as technology changes. i use cell phone camp here. yes, common carry regulations can apply to monopolies and utilities. and they can apply to other situations where you have more
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than one choice. nobody would really think it's ok for verizon wireless -- not to pick up verizon but they were the plaintiff in this case, for verizon wireless to block my phone calls to a certain number or group of numbers because i can always switch to at&t or i can always switch to sprint or t-mobile or some other carrier. these are just as valuable as they always been. yes, telephone and broad band are different but we want the same principles in place saying the person that provides my connection doesn't get to decide how i use it or who i call. based on the charges they set the rates but it should be spare and reasonable for me and i should be able to use it however i wish once i paid my bill. >> if you had your druthers would would the internet be in title 2? >> not the internet. there's distinctions here. there's internet access, wire we use and spectrum we use to get online. internet content i think we all agree should remain free from regulation, especially if not by or totally free from fec
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regulation. but as susan crawford said, it's like confusing the conversation for the sidewalk. we want conversation to be free and f.c.c. has no place regulating content online. they have always made sure communication pathways stay open. so today we have the vestiges of regulated phone system. the f.c.c. does not regulate what i say to you when i call you but they do make sure communications pathway is open, affordable, available, nondiscriminatory and there for everybody to use, not just those few that the phone company might favor. >> kevin werbach, you have been listening to this conversation. >> yes. i wanted jump in and take a step back and say first of all, let's make sure we understand what this debate is all about. we're getting into the details, are really important but what's at issue here is the openness of the internet. and the internet is the most extraordinary engine of opportunity, innovation, economic growth, freedom that we
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have ever seen. and basically the broadband platforms and systems we're talking about are the information infrastructure of the 21st century. they are the way that we're going to communicate with each other and also the ways that we're going to do business. so it's crucial to think about whether those platforms remain open the way they have historically. the internet has grown up as a network where anyone communicate, anyone can get online. a teeny little company can get access to the network and become, in some cases like google or facebook, a huge business. it's vital that the no change as the internet evolves. we're moving more into a broadband world and randy is right saying the internet is evolve and we shouldn't fix it in place. but i think everybody agrees these values are important. and that's important to say a significant development in the
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debate. we have been fighting about net neutrality or open internet rules for more than a decade now in the u.s. in that time there's been a real shift. when we started out, you had people like ed whit we are, who was then the c.e.o. of at&t saying things like no one can touch my pipes. we paid to build our network and we should decide what happens on it, even if that means discrimination essentially. now you have companies like comcast, david cohen of comcast has said, we think we're more committed to network neutrality and open internet than anyone. jim cicconey, head of public policy for at&t put put out a blog post we agree we shouldn't discriminate and block, and in fact putting that into our some of our terms of service. so i think there's an emerging consensus these values are important. then we get down how to do it. then there's legitimate disagreements about about what's going to but that has to be the starting point. why i share some of randy's views, i think the starting
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point of saying we don't think anything bad happened so therefore we shouldn't adopt anything is problematic because once we lose the openness of the internet f. we move into an environment where it's closed, where it doesn't have that competition. where investors, venture capitalists don't fund start-ups because they say, well, i'm not sure you will get access to the network, that has a -- essentially a vicious cycle and creates that prevents that kind of innovation. so we have to avoid that happening and in order to avoid that happening, we have to have a cop on the beat. and that's the role the f.c.c. has historically played in these communications markets, as matt said and it's the role it should continue to play here. so we have this debate about the best way to do it. and quite photographingly, i don't think in practice it would matter all that much between title two and the 706 process that chairman wheeler's proposing. again, we're talking here about
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hypotheticals and there are some forms of differentiation of traffic that are perfectly legitimate. for example, every i.s.p. blocks spam and denial of service attacks and no one is saying they shouldn't be able to do that. everyone allows companies and individuals to pay more for higher capacity. i may have a better broadband connection than my neighbor because i pay more. no one is saying that illegitimate. the question is as these new kinds of business models develop, new services get tried, what's the scope that the f.c.c. should take off the table? and there's a debate going on about whether the f.c.c. should totally preclude what's called paid prioritization or not. that actually doesn't go to the title 2 issue. so whichever set of rules the f.c.c. picks, there can be some limits the -- limits. as matt said the f.c.c. is more constrained on totally
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prohibiting these prioritization deals but it can allow for some degree of prioritization even under the common carrier rules as long as they're offered on the same terms to start with to everyone. so we're going to get very quickly into the wes no matter what happens here but i think we need to start with the recognition that we need to move forward. we need to get something adopted that's in place, that gets through the courts, and then we're going to add the fight inevitably about the details. >> i agree with, again, quite a bit of what kevin said, articularly about the values that he articulated. openness is important. so so is innovation, by the way. and not only innovation at the edge, the content provider's, application providers but also in the network because innovation can take place there. but i want -- to move this forward, i want to assume the
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some on is going to adopt new rules and i differ with kevin i think in this sense that he minimize the difference between two different approaches. title 2 approach and/or let's call it section 706 commercial reasonableness approach. and have said it may not make much difference. i think there is a significant difference. and i'm not entirely sympathetic to section 706 approach, although i did say the day that it leaked chairman wheeler might propose that, that it did have certain merits. hopefully try and move this debate in that direction. here's what the difference is
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and why it's important. i was actually at the commission from 1978 to '81. that was during the heyday of title two regulation of at&t. i was in the general council's office, associate general council. and i understand what's in title 2 and where it comes from. and there's a lot of regulatory baggage that comes with it. i know under one theory, truly i'm not going to get two deep into the wes but there's a theory the commission could adopt this title two regime and forebear from requiring all of the different requirement that's come with it. but they have to do with allocating cost as among different services, valuing property, getting the f.c.c.'s permission before you extend that works or discontinue networks. getting the f.c.c.'s permission when you have a director that is
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in common with a director of another company and things like that. by the way also interconnection with networks and traditional public utilities proceeding. there's a lot of baggage and it, in my view, it would not necessarily legally be easy for the commission to get rid of all of these various requirements nor could it be done in a short time. o aside from the rigidity of title 2, there's practical problems. let me focus on the commercial reasonableness standard. to me if there's going to be some action that's far preferable because if it's implemented properly, and it would have to be implemented this way if it's going to past judicial muster because i think, as matt said, if the court said the commission cannot in effect -- assuming doesn't reclassify, can't impose a regulation as ractical matter is just like
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the carry regulation. so the key would be interpret personal reasonableness so there's sufficient flexibility for the internet providers to be able to experiment with some new dels and i guess from my perspective just presume absent of some showing of consumer harm or, again, market failure or possibly there could be that. but at least go in with the esumption that the practices are going to be reasonable unless there's evidence presented to show they're not reasonable and to place the burden on the complaining party to show the unreasonableness. and then you would have a regime i think that perhaps in order to get past this issue that's been with us for over a decade, that we could live with and just see
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whether that works that way. >> randy said innovation could occur in the middle of the network and that true to point but i'm always skeptical of claims that my innovation is blocking your innovation, which is often the way these inowe vacations by phone companies, cable companies are phrased. an at&t or comcast says, allow us to prioritize or manage traffic in a way we find suitable that will make our network more efficient and we say will benefit our consumers, we just take those claims with a grain of salt, especially when we look for consumer harm. it's not always easy to prove what we're missing out on. >> it's not your innovation that may be blocking my innovation. egulators review and potential misjudgments and in having to make our priority judgments in advance about what's permissible any i'm not attributing ill intent to the regulators at
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all or even in confidence but that's just the nature of regulation that there can be those type of misjudgments. i would rather wait and see whether there's an actual marketplace problem and consumer harm before trying to stop something in advance. >> and i'm not necessarily attributing ill will to at&t and comcast, although sometimes i might, and as kevin pointed to whitaker, the reason we see at&t and comcast and verizon as well, somewhat quieter than the other two companies embrace the proposal and say they're fine with section 706, randy, you and i probably agree more than i do with kevin, i think there's a meaningful difference between 706 and title 2 and under title 2, the f.c.c. could keep the network open, sprept blocking and prevent driss crimm nation and monetizing of their network that i think these big companies want to dofment of course, they
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should be allowed to modernize their network as kevin said selling different amounts of capacity to different people but, two things, not by saying we will charge you more based on how you use that capacity. meaning if you want to go to netflix, cost you one thing but if you want to go to amazon, it costs you another. the problem with putting the burden of proof on the complainer, internet innovator or user is these companies are quite literally saying everyone on the internet is now a customer of the i.s.p. if i come to and i visit c-span using my broadband connection, suddenly c-span is not just comcast of its own internet provider, it's now a customer of my internet service provider. and can be charged for the privilege of reaching me and that's really discrimination and differentiation and prioritization we see out of bounds here, as harming innovation, as something that will be difficult to measure consumer harms because we won't know what we're losing out on once the internet service provider is in that driver's
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seat and can say only certain sites will reach you at a certain seed or certain sites reach you at all out of a comfortable relationship they're able to craft, whether my i.s.p. dictates whether other i.s.p.'s want to reach me. >> now we're starting to get into something new here. a lot of this debate we have been having is the same debate we can have on any telecom policy issue. there's always a reasonable argument with we shouldn't regulate ahead of time and reasonable argument why we should regulate ahead of time. the question is what's going on and how are things likely to evolve? part of what's new is realizing how little we actually know. so there are these relationships inside the internet and most of it is dark. most of it because the f.c.c. has not chosen to address the internet core market, there's no transparency about a lot of
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these interconnection agreements. even in cases like the recent deal between netflix and comcast, where it's reported that netflix is paying comcast but the terms of the deal are not public. one of the pieces of the f.c.c.'s open internet rules that survived the court review was a transparency mandate. and that's something that is actually more important than people give credit to and i hope the s.e.c. takes it and runs with it. we need to understand better what's actually going on and what might be going on in terms of network management. and in terms of other practices. the other piece here is we started suddenly to talk about something that technically isn't necessarily even part of net neutrality but it should be in the same debate, which is interconnection. so formally the open internet rules only apply to practice on the access provider's network. they don't apply to deals at the edge of the network. the deal between comcast and netflix is not at all subject to
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these open internet rules, regardless of what theory we're talking about. i think it should be in the same basket. i think we need to think about these issues for -- in the same way. basically because of what matt described. if an access provider can use its leverage, what's called terminating access monopoly, even if there's multiple, competing transit providers on the internet, once an access provider has enough market power, then it can potentially use that to extract tolls from other companies across the internet. that's something we should be worried about. i would agree with what randy would jump in and say, which is which, we don't know if that's going to happen. competitive pressures and so forth. we shouldn't absolutely preclude all of those deals but there needs to be an enforcement mechanism and review mechanism that provides transparency to the public and f.c.c. about what's going on and then we can work through all we deal with these kinds of issues. i think what is new is that there are a variety of other
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mechanisms that regulators can use. things like arbitration. things like adjudication proceedings, which the f.c.c. really hasn't used too much historically. i think we have an opportunity here to build some of these new approaches and there's a variety of interesting and good proposals that are there in the record already in the proceeding. once we get beyond this initial point we need to do something, then i think we can look and ultimately the only way we're going to answer these kinds of question that's we're arguing about here is seeing what actually gets tried. there's lots of theoretical prioritization and quality of service arrangement that's in practice have not been used and may not be used but let's see what actually happens and ensure there's a backstop in place so if something gets tryed that would cut off innovation, that there's an opportunity to stop it. >> again, i want to agree with quite a bit of what kevin said, particularly the transparency point that he began with is
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important. have always supported the f.c.c.'s transparency's provision as part of the open internet regulation. i have done that. there's always a question of how much and what the burdens are. but that's important. and it's important and kev kevin alluded to this. we haven't talked much about it but i began the discussion with it. it makes a difference as to whether or not you're talking about a market that is monopolistic in my view in which there's not competition or one in which there is some competition. we can debate and maybe we will do it another day, how much competition there is and whether it's enough. but this is not the marketplace we had back in the last century with ma bell. we do have wireless -- in fact, most people don't realize this, over two-thirds of the internet connections now in the u.s. are
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through wireless devices. and they're not even largely covered by the net neutrality rules. you may wish that they were but -- >> they should be. >> i think wireless carriers realize that. >> and most of the investment in the last several years, you know, has gone to the wireless side, which may tell you something about whether regulation matters. but here's really the point that i want to make. if we didn't have any competition, then consumers wouldn't have a choice and if a provider did something, quote, that's harmful, consumers didn't like it, we wouldn't have a place to go. but when you have competitive alternatives, they're not perfect. it's not like the wheat market. but when you have choices, then consumers can move towards another provider and that's important in this debate. >> i say it's important. i just think as i said at the outset there are some things we don't want communication
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providers to compete on and one of those is who blocks the least or who discriminates the least. the transparency provision is important, i agree. but it's not enough and even all of the other methods kevin listed, we feel like looking at the court case that the f.c.c. lost back in january, no matter what they try to do, whether it's some kind of alternative dispute regulation or some kind of stakeholder gatherings or any enforcement, that the cop on the beat, in this case if they use section 706 authority, will have no power to prevent bad things from happening. chairman wheeler says that's not the case. he said he will prevent bad things from happening usually this commercially reasonable test and we think he cannot do that. if you look at the restrictions it places on f.c.c. to prevent blocking, prevent discrimination. we talked a lot about not seeing market failure but we have several instances of at&t, comcast, verizon in different areas, whether we're talking about netflix interconnection agreements or not but things like not allowing certain video
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or voice chat applications to work on your mobile device. at&t has a long track record of blocking first and then allowing only later after some pressure. we have seen instance where's the carriers have tried to retain that control over who gets to use their services and how they can use them. and that's why we feel like we need to maintain this core communications network principle for broad band and as we had for other types of communications networks. >> when should we look for action by the f.c.c. on this proposal? >> well, the comment deadlines are set. they could act right at the end of those or could take a little white. everybody thinks they want to do something 24 year but comment deadlines july and september. whether they act in october or november, that would be kind of sprint speed for the f.c.c. to really get something done. only couple months after comments were done coming in but that's everybody's notion of what they're target is and what their time frame is now. >> if you want to add your comments to what the f.c.c. is proposing.
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or you can go to open and make your comments. gentlemen, i hope all three of you will come back once the comment period has elapsed and once we can talk more about this issue. unfortunately, we're out of time. kevin werbach with the university of pennsylvania, joining us from philadelphia. matt wood with free press, and randolph may with the free state foundation. this is "the communicators." >> c-span, created by america's cable companies 35 years ago and brought to you as a public service by your local cable or satellite provider. >> next, transportation secretary anthony foxx talking about the country's transportation needs as a reporters' round table hosted by the christian science monitor. topics included dwindling highway trust fund, national gas tax and g.m.'s automobile recall. this is an hour.
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>> our guest this morning is transportation secretary anthony foxx. this is his first visit to the land of low-calorie breakfast so we thank him for coming. he earned bachelor's degree at davidson college where he was the first african-american student body question and law degree from new york university. after law school he spent a month in new orleans playing trumpet and becoming friends with i wenten marsalis. after working at a law firm clerked for federal appeals court judge and later served in the u.s. department of justice and on the staff of the house judiciary committee. our guest returned to charlotte in 2001 to work in a law firm there and got elected to the charlotte city council in 2005 and re-elected in 2007. he was elected the city's mayor in 2009, youngest person ever to hold that job. he was confirmed as 17th transportation secretary last june. so much for biography. now on to the ever-popular process portion of our program. let me begin with a word


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